The Star Trust v Hamilton City Council

[2016] NZHC 821

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-120 [2016] NZHC 821

UNDER

Part 1 Judicature Amendment Act 1972

IN THE MATTER

of a local approved products policy under s 66 of the Psychoactive Substances Act

2013

BETWEEN

THE STAR TRUST Applicant

AND

HAMILTON CITY COUNCIL Respondent

Hearing:	(on the papers)
Appearances:	N Russell and J Braithwaite for the Applicant J A MacGillivray and L F Muldowney for the Respondent
Judgment:	28 April 2016

JUDGMENT OF WOODHOUSE J (Costs)

This judgment was delivered by me on 28 April 2016 at 2:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr N Russell and Ms J Braithwaite, Chen Palmer Public and Employment Law Specialists, Solicitors, Wellington

Mr J A MacGillivray and Mr L F Muldowney, Tompkins Wake, Solicitors, Hamilton

THE STAR TRUST v HAMILTON CITY COUNCIL [2016] NZHC 821 [28 April 2016]

[1]      The respondent has sought costs following discontinuance of the proceeding. The application is opposed.  Memoranda have been filed and counsel agree that a decision on costs may be made on the papers.

[2]      In March 2014 the applicant commenced proceedings for judicial review of the respondent’s local approved products policy made pursuant to the Psychoactive Substances Act 2013 (the Act).   The claim was directed to that part of the policy which restricted the location of retail premises for sale of psychoactive products within Hamilton.   The applicant alleged that the policy was illegal, unreasonable, and pre-determined.

[3]      The applicant applied for an urgent fixture with an accelerated timetable and orders to that effect were made.   The respondent complied with the accelerated timetable.

[4]      The trial was scheduled to start on 26  June 2014.   On 8  May 2014  an amendment to the Act came into force.  The applicant accepted that the matter was no longer urgent, but wished to maintain its proceeding with a revised timetable and a new fixture date. The applicant also filed an amended statement of claim.

[5]      On 22 May 2014, in a minute addressing the applicant’s application for an

adjournment because of the legislative changes, Brewer J said:

[6]       I note that I have discussed briefly with counsel whether the issues which the applicant wishes to have adjudicated should be heard before the new Regulations are promulgated.  It might be that the new Regulations will usher  in  such  a  different  regime  that  the  respondent’s  local  approved products policy will have to be revisited.  The respondent would prefer the Regulations to have been promulgated and assessed before being put to the cost of defending this proceeding.

[7]       Mr Russell [for the applicant] assures me that this is something which has been considered by his client and for practical reasons his instructions are to push on with the case.  I have warned him that this could eventually rebound in costs.   Much might depend on what the situation is after the new Regulations are known.

[6]      On 4 June 2014 the parties, in effect, agreed to adjourn  the proceeding. There were some further steps over the following months which need not be noted. On 2 December 2014 the parties agreed to a further adjournment for six months.  On

3 December 2014 there was a direction for a chambers list mention after 1 June

2015. The notice of discontinuance was filed on 16 June 2015.

[7]      The respondent seeks costs on a category 2B basis together with reasonable disbursements. The applicant relies on r 15.23 which provides:

15.23   Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[8]      Reference was made to observations on the application of r 15.23 by the Court of Appeal in Earthquake Commission v Whiting,1 and to Yarrall & Stephens v Earthquake Commissioner.2

[9]      The applicant submits that there should be no award of costs because of “the unusual circumstances of the proceeding”.  The unusual circumstances are the fact that the legislation was amended and this made the proceeding moot.  It was noted: “while the respondent’s local approved product policy remains in force and is unchanged, there are still no persons who could claim to be affected by the policy”.

[10]     I am satisfied the respondent is entitled to costs.  Under r 15.23 the Court has a discretion to order that costs lie where they fall, but it is not a discretion I consider should be exercised in favour of the applicant.  The applicant raised serious issues in respect of the decision making of the respondent.  The respondent actively contested those allegations.  Not insubstantial cost was properly incurred by the respondent in response to a claim that the applicant has not pursued.  In considerable measure the applicant’s position on costs requires an assumption that, but for the change of legislation, the applicant would have succeeded.  There is no justification for making an assumption one way or the other.  This is a case where r 15.23 warrants the order

sought by the respondent.

1      Earthquake Commission v Whiting [2015] NZCA 144 at [63]-[72].

2      Yarrall & Stephens v Earthquake Commissioner [2015] NZHC 1451 at [18].

[11]     There was no issue as to the quantification of costs.  Consequently, there is an order that the applicant pay the respondent costs in a sum of $19,701 together with disbursements of $246.22.

[12]     I note that, although the costs memoranda of the parties were filed some time ago, due to significant work pressures in the registry they did not get to me until 27

April 2016.

Woodhouse J